Federal District Judge Frank Montalvo disclosed new details Wednesday about the public corruption investigation under way in El Paso but tossed out one man’s objections to the secrecy of the government’s court proceedings.

In a 35-page memorandum of opinion and set of orders filed Wednesday, the judge rejected Carl Starr’s arguments against the court’s closed hearings. [View order via link below article]

Montalvo also indicated that he would to the same with future complaints that are based on the freedom of the press and the public’s right to know expressed in the First Amendment to the U.S. Constitution.

Various legal scholars interviewed by Newspaper Tree have challenged the need for the unusual secrecy measures approved by Montalvo –- measures that two former U.S. attorneys said they never needed, employed or saw before. [npt background]

Late Wednesday, Starr said he viewed the ruling as a partial victory because of the new information Montalvo disclosed and the documents he ordered unsealed.

“Really, I feel like I prevailed,” Starr said in an e-mailed statement. “My motion caused some unsealing and findings, and I am happy for the First Amendment.”

Starr, a civil rights activist who is not a lawyer but represented himself in the case, said he would need time to study Montalvo’s ruling before deciding what to do next.

Legal authorities have expressed surprise that the judge had not provided a written explanation for the secret measures he approved, and Starr requested that he do so.

Montalvo did just that with his memorandum of opinion, providing his reasons and legal basis for orders to close hearings and court dockets and to seal 23 documents in the cases of seven defendants who have pleaded guilty.

Giving in on certain points, however, Montalvo ordered a number of documents to be unsealed in the cases of seven individuals who have pled guilty, disclosing for the first time that those defendants posted bonds as is normal in criminal cases. The documents showing the bond amounts were not available late Wednesday.

The judge further disclosed that he did not order the secrecy on his own but closed the hearings and sealed documents upon the oral requests of the federal prosecutor, Assistant U.S. Attorney Debra Kanoff, and with the consent of defense lawyers.

“This court is not asking anyone to ‘trust me because I say so,’ ” Montalvo wrote. “Instead, the court is suggesting that the public should trust the system, because the procedures in place have withstood the test of time.

“Although we tend to equate transparency with openness, no investigation of this nature and magnitude can proceed unimpeded without the level of confidentiality discussed in this memorandum opinion. Under the circumstances, permitting the requested public scrutiny would obliterate the possibility of conducting the investigation.”

The judge did not unseal the defendants’ plea agreements, transcripts, search warrant affidavits and other documents in the case or go along with Starr’s request to open future hearings in the ongoing cases and investigation.

In dismissing Starr’s motion to intervene in the criminal cases, Montalvo noted that there is no accepted procedure for such a motion. However, he agreed to let Starr file additional pleadings in support of his case.

The judge also noted past cases in which news media have tried to intervene in criminal cases to open hearings and related documents to the public.

Courts, the judge wrote, “have implicitly recognized the ability of the press or public to object, on First Amendment or common law grounds, to a judicial decision closing hearings and sealing documents in criminal cases.”

Montalvo wrote that he would consider Starr’s effort to intervene on those grounds. He then denied Starr’s motion on those grounds as well.

New investigation details

Montalvo shed new light on the investigation that began in the summer of 2004 and “has allegedly uncovered systemic and wide-spread public corruption and other fraudulent activities directed by individuals within the greater El Paso community.”

“The initial cooperating witness engaged in over 350 consensually monitored conversations” using wiretaps beginning in July, 2005 and concluding in May 2006.

“Over 80 ‘persons of interest’ have been linked to the investigation,” though not all were linked to wrongdoing, the judge wrote.

“Of these individuals, 35 are past or current public officials, either elected or appointed, 13 are attorneys and three are or were judges,” he wrote.

Executing the first search warrant at Hospice El Paso on April 21, 2006, the FBI seized 554 boxes of evidence.

Searching El Paso’s National Center for Employment of the Disabled a month later, federal authorities seized 1,332 boxes at NCED (now ReadyOne Industries) and at the nonprofit’s accounting firm.

At the home of NCED’s crisis manager, Marc Schwartz, agents took 19 boxes of evidence a month later.

A fourth series of search warrants were executed at Access Administrators, a third-party health benefits administrator, at Access’ Advantage Care Network and Physicians Healthcare Management, the home of Access’ president, Frank Apodaca and, on Sept. 7, 2006, the home and personal office of former County Judge Luther Jones.

In the fifth series of searches, on Dec. 15, 2006, the FBI went to the home and business of Sal Mena Jr., an El Paso school trustee at the time, and seized 47 boxes of evidence as well as $28,250 in case from Mena’s safe deposit box.

Executing the sixth series of search warrants, on May 17, 2007, dozens of FBI agents searched the courthouse offices of County Judge Anthony Cobos and commissioners Miguel Teran and Luis Sariñana and then the home and office of Thomason Hospital board member Arturo Duran, taking more boxes of evidence.

The next day, agents executed civil seizure warrants on Roberto Gerardo “Bobby” Ruiz, a Bear Stearns investment broker at the time, and seized over 800,000 stock shares, $41,000 from his bank account, $25,000 from a profit sharing account and $20,000 in a 401-k account.

Going after Apodaca’s assets several days later, agents seized $240,000 from his bank accounts, $89,000 from his credit union account as well as two cars and a motorcycle worth $72,000.

They also went after a trust account belonging to Apodaca’s lawyer, Ray Velarde, and took $75,000 belonging to Apodaca.

“As of this writing, approximately 12 separate investigations are in progress as a result of the investigatory work initiated in the summer of 2004,” Montalvo wrote.

Supporting the continued confidentiality of search warrant affidavits, he wrote that he “was convinced that publicizing the content of these affidavits would jeopardize the investigation and risk the livelihood and welfare of the persons who have cooperated in this investigation.”

The prosecution stage of the investigation began in June 2007 with the case of Cobos’ assistant Travis Ketner, a lawyer whom the government charged in an information with four counts of conspiracy to commit wire fraud, wire fraud, deprivation of honest services fraud, and conspiracy to commit bribery “concerning programs receiving federal funds.”

With that information –- to which Ketner pled guilty on the day it was unsealed -– was a “bill of particulars” containing additional information and detail that, if disclosed, would “seriously impair the ongoing investigation,” the judge wrote.

As in the ensuing six cases, the notice of Ketner’s plea hearing did not appear on the court’s docket or calendar and the hearing was closed as were bond documents and Ketner’s release order.

Those cases involved former county Commissioner Betti Flores, architect Bernardo Lucero Jr., El Paso school Trustee Carlos Villa “Coach” Cordova, Roberto Gerardo “Bobby” Ruiz, Christopher Chol-Su Pak, and lawyer Raymond R. Telles.

Every court proceeding, the judge wrote, “was held confidentially and the filings sealed at the joint request of the government and defense counsel” to protect confidential sources, investigatory methods and the overall scope and progress of the investigation and witnesses.

Such secrecy, he wrote, lies within the discretion of government prosecutors and the courts but are subject to challenge on First Amendment grounds.

In each instance, Montalvo wrote, he weighed “the public’s right of access against the government’s need to maintain the integrity of its lengthy, complex, and ongoing investigation into public corruption, which the media itself has conceded is critically important to the community’s future prospects.”

The judge went on to cite a recent Texas Monthly article about the investigation by Paul Burka that referred to the current promising times in El Paso.

“For the moment however, El Paso’s future rests with the FBI,” Burka wrote. “Having started the crackdown on corruption, it must see things through to the end or there will be anarchy and the longed-for boom will not occur.

“No one is going to pour energy and effort and dollars into a city with a crooked government.”

At stake, Montalvo wrote, “is not secrecy for its own sake. The rights of the defendants are not in peril, as they have each, through their respective counsel, asked for the plea proceedings to be held confidentially. Each of them pleaded guilty freely and voluntarily.”

The judge, considering Starr’s request to unseal various documents, cited a series of cases in which the courts found “no First Amendment right of access” to hearings or documents considered vital to an ongoing investigation.

“It is not for this court or the public to seek to challenge this exercise of prosecutorial discretion or to force disclosure of the information and rationale prompting the United States Attorney’s Office to pursue this particular course,” Montalvo wrote. “For these reasons, the Court concludes it was proper to close the plea hearings which have occurred to date in this case.

“It further concludes it should maintain the plea hearing transcripts under seal at this time.”

Montalvo, however, agreed to unseal other documents with sensitive information blacked out, including bond settings, in the cases of the seven defendants who pled guilty.



David Crowder can be reached at dcrowder@epmediagroup.com and (915) 351-0605

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